Table 3-1

Question

Assume that John and Jane can switch between producing bread and wine at a constant rate.
Labor Hours Needed to Make 1
Bottle of Wine Loaf of Bread
Jane 2 1.5
John 3 1

Refer to Table 3-1. Assume that John and Jane each work 24 hours. What happens to total production if instead of each person spending 12 hours producing each good, Jane spends 21 hours producing wine and 3 hours producing bread and John spends 3 hours producing wine and 21 hours producing bread?
a. The total production of bread and wine each rise.
b. The total production of bread falls and the total production of wine rises.
c. The total production of bread rises and the total production of wine falls.
d. The total production of bread and wine each fall.

Answer 1

To determine the change in total production when Jane and John allocate their work hours differently, we first need to calculate how much each of them produces under both scenarios.

Initial Scenario (12 hours on both goods):

1. Jane spends 12 hours on each good:

   • Wine: 12 hours / 2 hours per bottle = 6 bottles of wine
   • Bread: 12 hours / 1.5 hours per loaf = 8 loaves of bread

2. John spends 12 hours on each good:

   • Wine: 12 hours / 3 hours per bottle = 4 bottles of wine
   • Bread: 12 hours / 1 hour per loaf = 12 loaves of bread

Total Production in the Initial Scenario:

• Total Wine = 6 (Jane) + 4 (John) = 10 bottles of wine
• Total Bread = 8 (Jane) + 12 (John) = 20 loaves of bread

New Scenario (different allocation of hours):

1. Jane spends 21 hours on wine and 3 hours on bread:

   • Wine: 21 hours / 2 hours per bottle = 10.5 bottles of wine
   • Bread: 3 hours / 1.5 hours per loaf = 2 loaves of bread

2. John spends 3 hours on wine and 21 hours on bread:

   • Wine: 3 hours / 3 hours per bottle = 1 bottle of wine
   • Bread: 21 hours / 1 hour per loaf = 21 loaves of bread

Total Production in the New Scenario:

• Total Wine = 10.5 (Jane) + 1 (John) = 11.5 bottles of wine
• Total Bread = 2 (Jane) + 21 (John) = 23 loaves of bread

Comparing the two scenarios:

• Wine production increases from 10 to 11.5 bottles.
• Bread production increases from 20 to 23 loaves.

Therefore, the correct answer is:

a. The total production of bread and wine each rise.